Play-To-Earn (P2E) games, once the most promising form of blockchain gaming, are now facing a crisis of trust.
The rise of the P2E space is due to the convergence of various trends. The popularity of cryptocurrencies exploded in the early 2020s. Its presence in the mainstream has led many players into what used to feel like the Wild West. The corresponding rise of NFTs has brought technology into the space that will push revenue and collectibility in new directions.
DeFi platforms also increase the usefulness of in-game currencies and items, as they can be traded and spent outside the game. But right now P2E seems to be in a very bad state.
Some of the industry’s brightest stars have serious health conditions. Axie Infinity, the world’s most popular P2E title for a long time, is his one such example. Only about 430,000 players have been seen in the last 30 days, according to ActivePlayer.io. This represents the worst month for gaming since October 2020. The game’s native token is also down about 93% from its August 2020 high.
Play-to-Earns Looks Like Ponzinomics, Critics Say
One of the fundamental problems with space is that many P2E players log in to make money. Many players likewise faded away when the potential for good returns disappeared. Many games are also less fun if you exclude the potential for earnings.
Damian Bartlett, team lead of W3E, the world’s first Web3 LAN gaming tournament, would like to see a great blockchain-based game that offers the same quality experience as its Web2 predecessor. “I see a lot of players aligning with my own views. We want fun games and the ability to own our own assets that we buy anyway in our favorite traditional games. P2E focuses on speculative assets and the games themselves are often second in priority Many of these games are DAO votes and therefore proposal votes are dominated by the will of the few whales Not the majority of players, it just triggers a whole cycle about money and cryptocurrency related to the game.”
“A good Web3 game is a simple fun game that people play regardless of assets, has NFT assets that can be purchased if they choose, and the complex value of volatile game currency allows them to buy-in without devaluing everything. and can sell out.”
But perhaps the fatal floor of the industry was the format itself. Many of his P2E titles are structured like a colorful and fleeting Ponzi scheme. (Ponzi schemes can be used when the operator can no longer attract enough new investors to pay the returns to existing investors, or when too many investors try to cash out at once. collapses into.)
Industry calls for a more sustainable model
Ultiverse CEO Frank Ma is one of those who believes the format was doomed from the start. “It is not based on a legitimate business model, but on the constant recruitment of new investors. The scheme does not generate revenue through any kind of production activity, but through the contributions of new investors. It is a zero-sum game, where the early investors’ gains come from the later investors’ losses, so that it will eventually collapse, leaving most of the investors with significant financial losses. You will suffer a loss.”
For the industry to continue to grow beyond Play-To-Earn, Ma believes there are some clear priorities. Education is one of them. There aren’t enough “old school” gamers familiar with Web3 and blockchain technology. And even when that is the case, the benefits of technology are often poorly communicated.
“Providing in-game items or other rewards for using Web3 features can be a strong incentive for gamers,” he said. Doing so could be a way to introduce players to the benefits of Web3.”
Please make better UI
Another is a widely recognized UI problem. Many Web3 games have a steep learning curve and can be uncomfortable for new players. Finally, Ma said the game’s integration needs to be improved. “Instead of making her Web3 game stand-alone, the Web3 game should work with her web2 studio, IP, and collaboration.”
Players are beginning to realize a fundamental weakness in many Play-to-Earn titles. Those who quit their jobs realize they may have made a mistake, but her Web3 community members, who were playing for other reasons, are tired of defending an unprotected system.
This spread of disenchantment means players are looking for better titles. That transition could lead to better in-game economics and playability. Boyan Wang, founder of P12, a Web3 gaming infrastructure project aimed at making the gaming economy sustainable, said.
As Web3 gamers learned more about its flaws, the Ponzi-like Play-to-Earn model no longer appealed. “Thus, P2E tends to be less and less compelling for gamers, as the source of financial gain from gameplay is undefined and losses can be exponential if it collapses.”
Blockchain games are still growing
2022 was arguably the worst year ever for Web3. Markets crashed and much of the industry set back due to well-known bad behavior. During its rise to the mainstream, much of the Crypto ecosystem forgot how to protect itself, so when repeated crises hit, much of the industry was caught off guard.
Blockchain games have largely avoided the worst criticisms. According to DappRadar, games will account for almost half of on-chain activity in 2022. Whether that means he will continue to grow in 2023 depends on one big question. Can Web3 make great games?
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